Sending out a strong, pro-Dalit signal to India Inc, the Mayawati government in Uttar Pradesh has decided not to release funds meant as subsidy for Tata Motors because it did not adhere to the state government’s affirmative action policy.
However, a senior official of Tata Motors’ Lucknow plant said the company believes it already employs more than the stipulated requirement of the three specified categories among its workforce but refuses to be drawn into a formal reservation per se.
“We are an equal-opportunity employer and we do not make any distinction among our employees on any basis whatsoever. However, for all new recruitments being done by us, we are giving our employees the option to declare their caste. But with the government not releasing funds meant as subsidy on this ground, we have been rendered uncompetitive in the market and put at a disadvantage as our goods are costlier than that of the other states that are giving many incentives to the industry. As a result, the second phase of our expansion plans has also been put on hold. The management is reviewing the viability of the expansion in the light of the government not releasing funds for us,” the official said on condition of anonymity, adding that the company stands to lose almost R150 crore on capital and infrastructure subsidies itself. “The tax and transport subsidy, however can take that figure to a whopping figure,” the official said.
The state government support flows in the form of infrastructure and capital subsidy, interest-free loans and transport subsidy for those investing R100 crore or more, and was introduced by the Mulayam Singh government in 2006 to attract industrial projects to the state. But soon after coming to power in 2007, the Mayawati government tagged the disbursement of the benefits to the private sector to her wider vision of social equality and justice. In doing so, industry was expected to reserve 10% jobs for SCs, 10% for OBCs (including religious minorities) and 10% for weaker sections of upper castes for all government-supported projects.
With this move, perhaps the first such, the Mayawati government has very firmly put its affirmative action initiative, envisaging job reservation for scheduled castes, other backward castes and the weaker sections among the upper castes for all government-supported projects, above economics.
The Tata Motors plant in Lucknow, which had expansion plans of R550 crore in the pipeline, was one 12 projects that